Every now and then in these posts, I reserve the right to whine about the disconnect between the superficial rhetoric of the presidential campaign and the profound nature of the problems facing our country. Take the debate going on now, and likely to continue, about job creation and the nature of capitalism. While Mitt Romney defends his business record and accuses President Obama of putting “free enterprise on trial,” the president holds a “jobs insourcing” media event to promote American manufacturing.
Romney’s claim that Obama is opposed to free enterprise is ridiculous, as is his notion that lower taxes and fewer regulations will cure the problems in our economy. Obama says he supports more U.S. manufacturing jobs, but here are the facts: In recent years, U.S. manufacturing output has increased by 30 percent, but jobs in that sector have fallen by roughly the same number.
This is the part of the larger structural changes that are reshaping our economy and that neither party has a handle on. It is no longer cheap labor that is taking American jobs. That shift has already happened and is unlikely to recur on a mass scale because: 1.) Those jobs are gone, and 2.) Developing countries face upward pressure on wages. What’s happening now is that technology, both information and physical, is becoming more able to replace humans in the supply chain of goods and services.
That is why we can have record corporate profits and stockpiles of cash and so little hiring. Temporarily, the market has figured out, as it always will to become efficient, how to produce more with less. But no one believes a jobless recovery is sustainable.
We are in unchartered territory, and everyone from the Tea Party to Occupy Wall Street knows it. The central promise of American life of hard work equaling a better future is shrinking. People are scared, and many are desperate for answers. So far, none are forthcoming from the presumptive nominees.